Mahindra & Mahindra (M&M), a leading player in the Indian automotive industry, has posted impressive financial results for the third quarter of the fiscal year, driven by robust performance in the automotive segment, a favorable product mix, and operating leverage benefits. Let’s delve into the details of the company’s stellar performance and its implications.
Standalone Performance
M&M’s standalone net profit surged by an impressive 60 percent Year-on-Year (YoY) to reach Rs 2,454 crore. In comparison, the Profit after Tax (PAT) for the same period last year stood at Rs 1,528.06 crore, showcasing a significant growth trajectory for the Mumbai-based automaker.
The company’s revenue for the third quarter witnessed a robust growth of 16 percent on an annual basis, amounting to Rs 25,642.4 crore. This growth was primarily led by strong volume expansion in the automotive segment. In the corresponding quarter of the previous fiscal year, M&M’s turnover was reported at Rs 21,653.74 crore.
Analyst Expectations and EBITDA
M&M’s quarterly results surpassed analysts’ expectations, reflecting the company’s operational efficiency and strategic focus. As per the average estimates of five brokerage firms, the standalone net profit was anticipated to rise by 45 percent YoY to Rs 2,212.46 crore, making M&M’s actual performance even more noteworthy.
The automaker’s earnings before interest, taxes, depreciation, and amortization (EBITDA) registered a notable increase of 9.7 percent, reaching Rs 3,590.3 crore compared to Rs 3,273 crore reported in the corresponding quarter of the previous fiscal year. Furthermore, the operating margin expanded by 80 basis points to 14 percent, underscoring the company’s operational efficiency and cost management initiatives.
Segment-wise Performance
In terms of volumes, M&M witnessed a commendable growth of 11.1 percent YoY, with total unit sales reaching 3,13,115 units during Q3FY24. While auto sales experienced a remarkable growth of 20.1 percent YoY, reaching 2,11,443 units, tractor volumes witnessed a marginal decline of 4 percent from the previous year, totaling 1,00,522 units during the last quarter.
Executive Insights and Outlook
Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector), M&M Ltd., expressed satisfaction with the company’s performance, highlighting a “strong quarter” for both auto and farm businesses. He emphasized M&M’s leadership position in the SUV segment and its robust tractor market share, despite industry challenges such as weather vagaries and lower reservoir levels.
Consolidated Performance
At a consolidated level, M&M reported a remarkable 34 percent increase in its consolidated profit after tax, amounting to Rs 2,658 crore for the third quarter ended December 31, 2023. The consolidated revenue also surged by 15 percent to Rs 35,299 crore, compared to Rs 30,621 crore in the year-ago period, driven by robust sales across verticals.
Mahindra & Mahindra’s stellar performance in the third quarter underscores its resilience and agility in navigating market dynamics and delivering value to stakeholders. With a strong focus on innovation, customer-centricity, and operational excellence, M&M is well-positioned to capitalize on emerging opportunities and drive sustainable growth in the automotive sector, reaffirming its status as a leading player in India’s automotive landscape.